Report Industry Investment Rating - Not provided Core Views - The new Iranian Supreme Leader Mujtaba's first statement indicates that blocking the Strait of Hormuz is Iran's strategic means and a major weapon against the US and Israel. Trump's TACO attitude exposes the US's weakness, and Iran will take advantage of it to raise negotiation demands, with conditions almost unacceptable to the US and Israel [5]. - Trump is in an awkward situation where he can't end the war, and ending it would be useless. Even if Trump ends the war unconditionally, Iran won't stop the blockade. The US currently has only two aircraft carrier battle - groups in the Middle East, far less than the six used in the Iraq war. The current military strength is insufficient to suppress Iran or even fulfill escort tasks. The US may have to escalate the war, launch a full - scale attack on Iran, or even carry out another decapitation to have conditions for peace talks [5]. - Looking back at previous Middle East wars, especially the Yom Kippur War, when oil embargo was first used as a weapon, it led to global economic "stagflation". US industrial production decreased by 14%, and Japanese industrial production decreased by over 20%, triggering a serious economic crisis in Western countries. Last year, low - cost energy suppressed the US CPI, and now oil prices above $100 will trigger an inflation chain reaction, possibly pushing the CPI back to a high level [5]. - The final outcomes of previous Middle East wars were products of compromise after extreme games among major powers. In the Yom Kippur War, the US and Israel finally compromised and stopped the war under the threat of the Soviet Union's possible direct participation and nuclear deterrence. In the current Middle East crisis, similar to the Yom Kippur War, Russia has benefited the most so far. It has dragged the US into the Middle East war, raised oil prices, which can reduce Western aid to Ukraine, increase Russia's income, and raise Russia's negotiation chips. Although Russia can't provide a large amount of weapons to Iran, it still plays a role in information warfare and diplomacy. China clearly opposes the war but has no effective means. The oil shock is not beneficial to the Chinese economy, but China is not the most affected. If the US is severely hit, it is beneficial for China to increase its negotiation chips with the US. The game among major powers in the Middle East is far from reaching the limit [7]. - In the market, the US stock market shows an arc - shaped top trend, and the US Treasury yield curve moves towards a bear - flattening. Stock markets in India, South Korea, Japan and other countries with high energy risk exposure are the most affected. Overall, the conditions for all parties to end the war and hold peace talks are not met, and war escalation is a high - probability event. Investment strategies should focus on risk prevention. The A - share market also faces great pressure and may need to fall to create room for opportunities this year [8]. Summary by Related Catalogs Why is the impact so huge? - Strategic counter - measure upgrade: Arab oil - producing countries first used oil as a geopolitical weapon rather than just an economic commodity [12]. - High global dependence: Western countries at that time were highly dependent on Middle East oil, with nearly half of their total oil demand imported from Arab countries [12]. - Supply - demand imbalance: OPEC's significant production cut (25%) and embargo jointly tightened the global oil supply [12]. - Dollar system resonance: Combined with the collapse of the Bretton Woods system in 1971 and the decline of the US dollar's credit, these three factors jointly led to a super oil - price market [12]. How did the war end? - Battlefield turn and cease - fire resolution (October 22 - 26): On October 22, the UN Security Council passed Resolution 338, requiring both sides to "immediately cease fire and implement Resolution 242". The cease - fire took effect at 6:52 pm Israeli time [12]. - Cease - fire breakdown: The Israeli army continued to advance and surrounded Egypt's 3rd Army on the 23rd, controlling the refinery on the outskirts of Suez City and cutting off its supply line [12]. - Second cease - fire: On October 24, under the dual pressure of the US and the Soviet Union, both sides finally complied with the cease - fire agreement, and large - scale fighting basically ended. On October 26, the formal cease - fire took effect, and the war actually ended (lasting only 21 days) [12]. Oil price trends and impacts - The current round of oil prices is likely to peak before the end of the war, mainly due to information expectations in the futures market and the large - scale oil reserves established by the G7, which have a certain buffering effect. This oil crisis may bring a major opportunity for the revitalization of the new - energy industry in a trough, and it is recommended to focus on it [13]. - During the Fourth Middle East War, the end of the military conflict did not mean the end of the energy crisis, and the political impact of the oil weapon had a significant lag. The decline in oil prices was the result of the joint action of political negotiations, market regulation, and policy responses. This crisis promoted the global energy - security strategic transformation, including Western countries establishing oil reserves, promoting energy diversification, accelerating the R & D of new - energy technologies, and the rise of the Japanese automobile industry [15]. - Specific oil - price changes at different war nodes: When the war ended on October 26, 1973, oil prices continued to rise from $10 to $13 due to the ongoing embargo and market panic; on January 18, 1974, when the Egypt - Israel cease - fire agreement was reached, oil prices peaked at $13 as the peace process started and the market expected the embargo to be lifted; on March 18, 1974, when the embargo was lifted, oil prices began to fall as supply recovered and political risk premiums disappeared; in September 1975, when the second - stage Egypt - Israel agreement was reached, oil prices stabilized at $9 - $10 as the Middle East situation eased and the market fully adapted to the new price system [14].